The government has launched a consultation to ensure high needs cash is dished out as “fairly as possible” as councils struggle with funding black holes.

The consultation, which runs until March 24, will initially look at changes for just the 2022-23 year, but views are sought from councils and schools on longer-term changes that will be “considered in the future”.

High needs funding is issued to local authorities based on nationally-set criteria. It funds places for pupils with a statement of special education needs or an education, health and care plan (EHCP).

For some councils, the funding isn’t enough to cover growing demand – resulting in cash for mainstream schools being diverted to make up shortfalls.

The government increased high needs funding by £780 million this year, but most of it was swallowed up to plug existing deficits.

“We are aware that many local authorities have in the past spent more on high needs than we have allocated, and therefore want to make sure that we are allocating high needs funding as appropriately and fairly as possible,” the consultation said.

It’s the first stage of a review, and will also take responses into account for “longer term changes to the formula that could be considered in the future”.

Ministers are looking at wider SEND system changes. The government’s delayed response to the SEND review is due to be published in spring.

Here’s what the consultation is proposing:

1. Finding an alternative to the ‘historic spend’ factor

One of the factors used to determine funding is based on historic spend to ensure differences in local circumstances are acknowledged.

But the consultation says this factor probably doesn’t reflect the current situation in a local are now, so they want to replace this and are asking councils and schools for their views.

Previous research showed the main drivers behind the difference in spending by councils was parental preference, capacity and ability of providers and the pattern of provision provided.

But the consultation adds it is “important that any factor we use instead of historic spending does not create perverse incentives”. The earliest the change would be introduced is in 2023-24.

 

2. Using 2019 attainment data for next two years

Low attainment at the end of key stages 2 and 4 is used as one of the indicators of SEND under the formula. But for the coming years, that data won’t be available as exams were cancelled.

Instead, it’s proposed data from 2019 will be used as a substitute for the missing 2020 attainment data to work out funding for the 2022-23 year.

With exams cancelled this year too, the consultation proposes 2019 attainment data is also used in place of both 2020 and 2021 attainment data to work out 2023-24 funding.

 

3. Plans for new proxy factors for SEND

As well as historic spend and low attainment factors, other measures such as the number of children in bad health, on free school meals and in families given disability living allowance are used as proxies for children with SEND as part of the formula.

The government has faced calls to base allocations on the actual number of children with education, health and care plans. But they say this is not a “robust indicator” of needs as there’s not a consistent national threshold for issuing a plan (it varies by local authority).

The SEND review will consider providing more consistency on EHC needs assessments. But responses are wanted on whether any new factors could replace the current “proxy” factors which may have become out of date or to address particular types of needs.

“This will then inform our thinking on potential changes to the high needs national funding formula for 2023-24 onward,” the consultation said.